Ciena to Buy NT’s Optical/Ethernet Assets

By Mark Evans | Published: October 7, 2009

Picture 2In a move that was prematurely announced last week, Ciena has made a “stalking horse” bid for most of Nortel’s optical and Ethernet assets. The offer is worth $521-million – $390 million in cash and 10 million common shares.

Ciena disclosed the deal last Friday in a press release on its Web site. The press release was quickly taken down, and replaced by another press release that Ciena was in deep discussions with Nortel but a deal was contingent on a competitive bidding process.

Ciena said it will keep 2,000 of Nortel’s employees. The assets to be acquired had about $1.36 billion in revenue last year, and $556 million during the first six months of 2009.

In a statement, Ciena CEO Gary Smith said:

“This is a unique and exciting opportunity for us to accelerate our existing strategy and the pace of our growth plans by two to three years. We believe this transaction will position us for faster growth by giving us greater geographic reach, broader customer relationships and a deeper portfolio of solutions. We believe we are best positioned to leverage these assets, thereby creating a significant challenger to traditional network vendors.”

For more, see the Wall St. Journal.

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  • protosphere

    “How much do you expect MEN to go for? I couldn't imagine it going under 800millions.”

    I could.

    Some one pressed me for a value a few months ago and I reluctantly and bravely spewed out $500 mill… Seems I was 21 mill off, like a few day off the restatement dates contest month after month, for those who remember me way back on Yahoo=)

    Can see it rallying that great a premium as their other assets given they had it on the auction block already and not fetching what they wanted. Can't see them have taken it off either to claim it was no longer available =)

  • protosphere

    yep, propaganda starts early, Nortel must be contagious

    Seimens also dedicated energies towards a welcome letter for Nortel employees too when they were in stalking bid , for all the good it did them having been beat out by Ericsson. =) In this case, I suspect they will win MENS. =)

  • exnt_x_2

    What a “millions?”

  • scalppeeler

    You might be right.
    You might also be wearing alot of egg on your face.
    Bold prediction to say it will go for a measly 521 Million.
    You have six weeks to change your mind.
    The answer is coming auction day.

  • S_O_S_This_is_HMS_Nortel

    Just another HR suit…its' all a number for them

  • zeroman

    Ciena $918 million in cash $810 million in debt.

    If they use their own cash they will be strapped. Cash flow is negative (-380 million in 2008) which will only get worse. If they borrow debt will skyrocket, where it will equal total sales. Same crevice Nortel got into.

    Does not seem to be a very sound deal. And don't think they can go very high if this gets into the 700 million range. It could bust up both businesses.

  • nosphere

    That was Nokia-Siemens Networks genius…this only shows how superficial your knowledge of the industry/events is. Take a break from posting and do some work for a change.

  • zeroman

    when did you start expecting nortel to stick with its plans. they always say one thing and do the complete opposite with impunity. it should be all cash. why should creditors be stuck with someone else's stock that could go to zero by the time they get a portion and allowed to dump it.

    but one thing I am surprised. how come the nortel debtors cannot foreclose on Nortel assets instead of the company managing liquidation? would another foreclosing party ensure they get the best deals than nortel doing it through the courts?

    if someone loses the house the bank forecloses. they dont have any say in who buys, terms and conditions. maybe thats why they stayed in chapter 11 but operating in chapter 7 mode. surprising that its allowed.

  • zeroman

    that is what most can do no wrong people must have felt before the axe fell. all the self entitled turds like you feel that way. if you had something positive to post or reasons by countering what others are saying then you would post.

    you have nothing of value to say or the guts to say it.

  • zeroman

    they will once all the nortel execs get in, sack the incumbents and take over. been there, done that, have many t-shirts.

  • happy2b

    Agee, I don't believe Ciena will be successful, the bidding will go higher and Ciena doesn't have deep enough pockets, or they will have to borrow if they can get the finiancing and go deeper into debt, thus finishing them off. Another bidder will be successful at buying the MEN organization.

  • less

    I got plenty of time. Last week's Six Sigmaish metrics revealed that I wasn't right for the job. Its a great company from what I've seen; they have it together like NT did in '99 – but they also throw stuff away like its 1999 which I found a tad disconcerting, beings how NT had a habit of doing the same only to end up selling their fluorescent lightbulbs at flea market.

  • zeroman

    Pathethic Boring Technology (PBT)

  • less

    I know for a fact that no bankruptcy filing is imminent; Nortel spokesman Ronald Alepian said so.

  • less

    I heard no bankruptcy filing is imminent straight from NT brass

  • less

    I can't help but mention that fluorescent bulbs qualify as “optical” assets, too, no?

  • less

    I can't help but mention that fluorescent bulbs qualify as “optical” assets, too, no?

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